MARRIED IN FLORIDA: HOW DO YOU LIKE YOUR PRE-NUP? PART II

Having discussed what your State of Florida provided Pre-nuptial Agreement provides with regard to assets and debts incurred by the parties during the marriage in Part I of this article let’s take a look at the provisions for alimony. Again, what’s that you say, you don’t have a Pre-nuptial Agreement and again, sure you do you just didn’t negotiate it, write it or sign it. You didn’t do these things because the State of Florida wrote it for you and as far as your responsibility to support your spouse or right to receive such support after the end of the marriage is concerned the agreement goes something like this:

But wait I’m getting a little ahead of myself here. I should point out that the Florida provided Pre-nuptial Agreement that we are about to review only came into existence, in its current form, on July 1, 2010. Before that date the state had a previous version of these requirements that were modified by statutory amendment. Some of the changes were subtle and some were substantial and the relative degree of those changes would, of course, depend upon which side of the equation you were sitting. Suffice to say however, if you entered into a marriage prior to  July 1, 2010 and had read the alimony provisions provided for under the then existing statute and decided that it was fine for your situation you may not be of the same opinion after the July 2010 amendments.

So with that said let’s see what the state has provided for you in its newest rendition of the alimony portions of your Pre-nuptial Agreement. First and foremost and regardless of the length of your marriage the parties must first determine whether or not one of the parties has need for alimony and if so, whether the other party has the ability to pay it. This by the way is a new provision.  So what does this mean exactly? Does it mean that if the economically challenged spouse has enough income to meet his or her basic needs; housing, utilities, food, etc...; even though the other spouse has an income that far exceeds his or her basic needs that alimony is not available? Well, maybe and the courts have struggled with that question as well.

Nevertheless, let’s assume that we have a need and ability. Thereafter, because there is no set amount or duration for the alimony the parties must consider some factors of the marriage to determine the amount and the duration for the alimony. But what factors are relevant? Paraphrasing from Florida Statue 61.08 with examples and comments italicized, the relevant factors are:

(a) How the parties lived, financially speaking, during the marriage. Wait a minute doesn’t this seem to contradict the first thing that needed to be determined regarding need and ability. So what if the economically disadvantaged spouse can afford all his or her basic needs and take a weeklong vacation to Europe each year but during the marriage the parties took two weeklong vacations to Europe each year. Does that mean that the economically disadvantaged spouse is entitled to alimony? Well, again, maybe.

(b) The length of the marriage. This will become even more important under later language of your Florida provided Pre-Nuptial Agreement.

(c) The age, physical and emotional condition of each party.

(d) The financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each. Ok, so assume the economically disadvantaged spouse receives an inheritance that provides him or her with a decent income from the stock portfolio included in the inheritance, could that prevent him or her from receiving alimony even though they would be entitled to the same if there was no inheritance? Possibly, and it would seem to be logical but let’s look at it from the other side of the equation. But for the divorce, the spouse receiving the inheritance income would be able to utilize that income for some of the luxury items available in life not just his or her basic needs. Doesn’t it seem that the economically advantaged spouse is being relieved or his or her duty at the cost of the other.

(e) The earning ability, education of the parties and, when applicable, the time necessary for either party to acquire sufficient skills to enable such party to find appropriate employment. Wow, that’s a lot in one factor. So one spouse is going to argue that the other could return to work making such and such amount of money and therefore has no need for alimony and the other is going to argue that he or she could never make the amount of money the other spouse makes and even if he or she could that earning ability has been decreased by such and such amount of years and as such their retirement years have been affected and they should be compensated for the same. Plausible arguments? Maybe.

(f) The contribution of each party to the marriage, including, but not limited to, homemaking, child care, education, and career building of the other party.

(g) The responsibilities each party will have with regard to any minor children they have in common. Umm, I hear you say, I thought child support was supposed to cover that? Maybe.

(h) The tax treatment and consequences any alimony award, including the designation of all or a portion of the payment as a nontaxable, nondeductible payment. Are you thinking right now, “Hold on we’re not tax experts how on earth are we supposed to figure that out” Well, you may not be, but you’re probably going to have to hire one.

(i) All sources of income available to either party, including income available to either party through investments of any asset held by that party. Kind of a repeat and combination of (d) and (e) above but just stated more concisely in case you didn’t think this was included in (d) or (e).

and, of course, the all encompassing:

(j) Any other factor necessary to do equity and justice between the parties.

Ok so now we know what factors we have to examine to determine the amount and duration of any alimony obligation or right created during your marriage, right? Not quite. Your Florida provided Pre-nuptial Agreement also includes some rules based upon the length of your marriage, what types of alimony may or may not be available based upon the length of your marriage and how even the type of alimony may be limited based upon the length of your marriage.

Let’s start with the types of alimony available again paraphrasing from Florida Statue 61.08 with examples and comments italicized, the available types of alimony are:

1.  Bridge-the-gap alimony: is designed to assist one party by providing financial support to allow the party to make a transition from being married to being single. It must be for legitimate identifiable short-term needs, the length of the support cannot exceed 2 years, it terminates automatically upon the death of either party or remarriage of the receiving party and it cannot be modified in duration or amount. Think paying your spouse’s moving expenses and rent or mortgage payment for a while.

2.  Rehabilitative alimony: is designed to help a party obtain skills or credentials that will help the party become self supporting. The parties must develop a specific stated plan of rehabilitation for the economically challenged spouse and this type of alimony may be modified or terminated earlier than initially anticipated; based upon a substantial change in circumstances, noncompliance with the plan or completion of the plan. Assume your spouse has always wanted to become a Dolphin Trainer (the mammal not the football player), or something else you always thought was ridiculous well you may be helping him or her financially obtain the training to become one after your marriage has ended. I personally don’t think Dolphin training is ridiculous but you might.

3.  Durational alimony: is designed to provide a party with economic assistance for a set period of time following a marriage of short or moderate duration or following a marriage of long duration where permanent alimony is inappropriate. It terminates upon the death of either party or upon the remarriage of the receiving party. It may be modified in amount or terminated early based upon a substantial change in circumstances but it cannot exceed the length of the marriage except under exceptional circumstances. You may have figured this out already, but let’s assume you are receiving durational alimony of $1,500 a month for a period of 10 years, the length of your marriage, and it was anticipated at the time you agreed to that amount that you would continue working in your present job earning $4,500 per month. Nine years and eleven months later your employer shuts it doors and your unemployed. Can you go back and renegotiate the alimony? Not likely. Why? Because the Florida legislature said so, that’s why.

4.  Permanent alimony: is designed to provide for the needs and necessities of life as they were established during the marriage for a party who lacks the financial ability to meet his or her needs and necessities of life. It can be established following a marriage of long duration if appropriate after consideration of the factors mentioned above. It can be established following a marriage of moderate duration if such an award is appropriate based upon clear and convincing evidence after consideration of the factors mentioned above, or following a marriage of short duration if there are exceptional circumstances. Before awarding this type of alimony it must be determined that no other form of alimony is fair and reasonable under the circumstances of the parties. It terminates upon the death of either party or upon the remarriage of the party receiving alimony. It may be modified or terminated based upon a substantial change in circumstances or upon the existence of a supportive relationship of the receiving party. Terminated due to supportive relationship? Yes, basically a relationship with a third party, not necessarily an intimate relationship, in which the alimony receiving party and the third party are sharing living expenses, holding joint financial accounts or otherwise financially supporting one another or the third party is financially supporting the alimony receiving spouse.

So now you know the factors relevant to determining alimony and what types of alimony are available under your Florida provided Pre-Nuptial Agreement. But, your saying “wait” what was all that talk about short, moderate, and long duration marriages that was mentioned above. Not to worry the state has figured that out for you as well. A short duration marriage is one less than 7 years in length, a moderate duration marriage is greater than 7 years but less than 17 years, and long duration marriage is a marriage having a duration of 17 years or greater. But what about the situations where the parties were together for numerous years before  getting married and the marriage really only represents a small portion of the parties total relationship. Simply stated it doesn’t matter and this Florida provided Pre-nuptial Agreement doesn’t address it.

Having read through this article and Part I preceding it you may have noticed that your Florida provided Pre-nuptial Agreement requires numerous questions to be decided and more appropriately stated argued and you would be absolutely right. So when you hear comments like “I can’t believe how much time it took for me to get divorced and the unbelievable costs” from friends, neighbors and co-workers, now you should have some idea as to why and we haven’t even touched upon the issues of child/parent time sharing and parental responsibility.

So I’ll ask the question again, do you think a pre-nuptial or post-nuptial agreement might be in order for you and your prospective or current spouse?